Saudi Arabia has lifted its veil of secrecy ever so slightly. Deputy Crown Prince Mohammed bin Salman gave his first-ever live interview to Saudi-owned Al-Arabiya television on April 25, less than an hour after the Cabinet in Riyadh approved the kingdom's National Transformation Plan. The five-year plan, which will kick off officially in the next couple of months, outlines Saudi Arabia's strategy to expand and develop its economy while de-emphasizing oil revenue. Within the framework of the larger Vision 2030, the plan focuses on broadening privatization efforts, lifting power and water subsidies across socio-economic classes, decreasing unemployment, bolstering domestic industrial military production, and spinning off some of Saudi Arabian Oil Co.'s assets into what the kingdom hopes will become the world's largest sovereign wealth fund.

Analysis

Among the Gulf Cooperation Council (GCC) countries, Saudi Arabia has the longest tradition of setting out ambitious economic goals encapsulated in five-year plans. The kingdom implemented its first five-year development plan in 1970, 11 years before the GCC even formed, and finished its ninth plan in 2014. Nonetheless, compared with its neighbors, Saudi Arabia is a late adopter of grander "vision" plans. Bahrain, the United Arab Emirates and Qatar announced National Vision 2030 plans in 2008, and Kuwait announced its State Vision 2030 in 2010. This longer-term planning represents an important shift for the GCC, indicating a change in the way the Gulf countries are considering their economic futures. Whereas previous development plans across the region focused on gross domestic product targets and the spending that would surround them, the longer-term visions chart a flexible course for achieving goals less dependent on specific GDP figures. Since GCC governments need to cultivate more adaptive investment environments and proceed with economic reforms to appeal to increasingly young, educated and interconnected populations, this flexibility is essential.

Putting a Face to Reform

But most of Saudi Arabia's National Transformation Plan was made public before the April 25 announcement. Consequently, more important than the subject of bin Salman's interview was its subtext. The latest in a series of prominent and unprecedented interviews that the prince has given recently, bin Salman's television appearance is significant for the transparency it represents ó the type of openness and responsiveness that Saudi youth demand. In this way, the announcement was intended less for international markets than for young Saudis who want a future as prosperous as the one their parents have enjoyed. During the interview, these young people heard their deputy crown prince assure them that the kingdom is aware of and receptive to their needs. Two days before bin Salman's appearance, Saudi Arabia's justice minister gave an interview on Al-Arabiya, further underscoring the move toward transparency that the infamously opaque kingdom has undertaken lately.

So far, restructuring the Saudi Arabian Oil Co., better known as Saudi Aramco, has been a central component of the promised reforms. As much as 5 percent of Saudi Aramco will be opened to initial public stock offering, most likely next year, and other units may be listed in the future. The rest of Saudi Aramco would be placed under the ownership of the Saudi Public Investment Fund, which the Saudi government hopes to expand to a scale rivaling the Norwegian Oil Fund, with a value of $2 trillion by 2030. At the same time, bin Salman has promised that Saudi Aramco's board will run the company and that political intrusion on the company's decision-making will be limited. On top of this, the company's financial information will be released. As the economic juggernaut of Saudi Arabia's oil and natural gas industry, Saudi Aramco provides an important model for reform, indicating that all of Saudi Arabia's economic actors need greater transparency and that no single economic entity is too close to the House of Saud to avoid it.

Realizing Reforms

Furthermore, the country's water and electricity minister was fired during the week of April 18 in response to public outcry over increased tariffs. Since the first subsidy cuts went into effect in December 2015, some Saudis have reported 500 percent increases in water bills. Dissatisfaction grew until ultimately someone had to take the fall for it. But the minister's dismissal is only a stopgap solution to the problem of reform. Although the subsidy cuts aim to generate $30 billion per year by 2020, 86 percent of Saudis reportedly support subsidies, which they have known for most of their lives. Until Riyadh finds the sweet spot between public outcry and utility prices high enough to alleviate the country's record budget deficit, reform progress will be slow.

As Saudi Arabia heads on its path toward ambitious reforms, the minister's firing was the first of many challenges that lie ahead. The vision plan does not offer a perfect set of steps to reach the country's goals or an actionable way forward for financial planners, investment bankers and consultants. Instead, like those in neighboring Gulf states, Saudi Arabia's vision plan is more about tightening the social contract. It is a promise to the kingdom's citizens that the House of Saud is working to keep up its end of the bargain even if oil, still the backbone of Saudi Arabia's economy, is no longer as lucrative as it once was. Whether young Saudis will continue to put their trust in the House of Saud, and whether the lofty tenets of Vision 2030 will hold in the face of compounding political, social and security pressures, are the looming questions on the kingdom's horizon.